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Platinum Underwriters: A Strong Buy

Zacks Equity Research

On Mar 20, Zacks Investment Research upgraded Platinum Underwriters Holdings Ltd. (PTP) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Platinum Underwriters witnessed rising earnings estimate on the back of strong fourth-quarter 2012 results, which included a positive earnings surprise of 37.31%. Moreover, this property and casualty insurer delivered positive earnings surprises in 3 out of 4 quarters in 2012 with an average beat of 46.27%. The long-term expected earnings growth rate for this stock is 8%.    

Platinum reported its fourth-quarter results on Feb 6. Earnings per share came in at 92 cents surpassing the Zacks Consensus Estimate of 67 cents. Results also improved 73.6% year over year from 53 cents in the year-ago period.

Results largely benefited from strong reserve releases and realized gains as well as moderate catastrophe losses.  

Top line improved 1.4% year over year to $185.5 million, driven by strong improvement in net realized gains on investment (up 2470.3% year over year).

Expenses in the fourth quarter witnessed a sharp decline of 72.1%, attributable to an 18.5% decline in net acquisition expenses.

Combined ratio improved 7680 basis points year over year to 25.4% in the fourth quarter.

During the fourth quarter, Platinum purchased 0.1 million shares for $6.1 million

The Zacks Consensus Estimate for 2013 increased 3.5% to $3.15 per share as 1 of 4 estimates was revised upward over the last 60 days.

Other Stocks to Consider

Other property and casualty insurers like Arch Capital Group Ltd. (ACGL), Cincinnati Financial Corporation (CINF) and Navigators Group Inc. (NAVG), carry a Zacks Rank #1 (Strong Buy) and are worth noting.

Read the Full Research Report on PTP

Read the Full Research Report on CINF

Read the Full Research Report on ACGL

Read the Full Research Report on NAVG

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